By including a severability clause in a contract, the parties to the contract can make sure that if one or more of the terms in the contract is ruled void and unenforceable by a court, the remainder of the contract is still valid.
A clause may be ruled unenforceable if the parties to it go to court to settle a dispute that arises over it. A clause may have been faulty from the beginning – particularly if there wasn’t sufficient (or any) legal review of the contract. Sometimes, however, changes in the law can make one or more clauses unenforceable.
A severability clause typically states something to the effect that if a provision of the contract is determined to be invalid, illegal or unenforceable, that doesn’t affect the enforceability of any other provision.
The clause can single out certain terms in a contract that cannot be severed without voiding the entire contract. That generally applies to provisions that are integral to the purpose and nature of that contract.
Savings and reformation language
These clauses typically contain two types of language: savings and reformation. The savings language is what states that if one or more terms of the contract are voided, the remainder of the contract is still valid. In fact, severability clauses are sometimes referred to as savings clauses.
Reformation language describes what happens to the clauses deemed void and unenforceable. For example, parties to the contract may agree that a court can modify an unenforceable clause (especially if it’s something relatively simple like a change in the law or regulations) to make it enforceable. If the parties to a contract don’t want any invalid clauses modified, the severability clause can state that.
Severability clauses aren’t as simple as they may seem. It’s crucial that parties to a contract ensure that such a clause accurately reflects what they want to occur if a part of that contract is ruled invalid. When each party has its own legal guidance, it can help to ensure that the contract accurately reflects their intentions and protects their rights.